New York City Bans Employer Inquiries Into Salary History

On May 4, 2017, New York City Mayor Bill DeBlasio signed a law amending the New York City Human Rights Law, barring all public and private New York City employers from asking job applicants about their prior wages and salary history. The law will take effect on Tuesday, October 31, 2017. The new law makes it an unlawful, discriminatory practice for an employer to inquire about or rely upon the salary history of a job applicant to determine their salary amount during the hiring process.

The salary inquiry law bans New York City employers from:

Making an inquiry, either verbally or in writing, to an applicant and/or the applicant’s current or prior employer, to obtain the applicant’s salary history;

Searching public records for an applicant’s salary history; and/or

Relying on a job applicant’s salary history when making an offer of employment or extending an employment contract to the applicant.

Salary history is broadly defined in the bill as the applicant’s “current or prior wage, benefits or other compensation.” However, salary history inquiries do not include inquiries into the objective measure of the applicant’s productivity, for example, through inquiries on revenue, sales, or production reports. Further, employers may still discuss the applicant’s salary and benefits expectations, including the amount of unvested equity and deferred compensation an applicant would forfeit through resignation from his or her current employment.

The law contains several other exceptions to the prohibition on salary inquiries, which include the following:

Employers can consider and verify an applicant’s salary history if the applicant discloses the information voluntarily and without prompting;

Where federal, state, or local law specifically authorizes the disclosure or verification of salary history;

Where salary is determined by procedures in a collective bargaining agreement;

When current employees are transferred or promoted within the company; and

When a background check for non-salary related information inadvertently discloses salary history, provided the employer does not rely on that information in making an offer of employment.

The New York City’s Commission on Human Rights (NYCCHR) will be responsible for investigating complaints and enforcing the new law. The NYCCHR will also have the authority to impose fines ranging from up to $125 for intentional violations and up to $250,000 for intentional malicious violations.

New York City employers must start to update their employment applications and train their recruiters and human resources personnel on the new requirements to ensure compliance by the October 31, 2017 deadline. Employers may also be forced to limit the scope of their background checks and revise their notices under the Fair Credit Reporting Act.